Western efforts to pressure Iran with an oil embargo are “casting a shadow over the global economy,” said the People’s Daily, the main Chinese Communist Party mouthpiece. It appealed to other governments to “keep calm and restrained, and not escalate tensions.”

China has rejected sanctions. The world’s second-largest economy gets about 10 percent of its oil imports from Iran. Chinese analysts say an embargo could be damaging because Beijing would be hard-pressed to replace those supplies.

Merkel appealed on Thursday to Beijing, the biggest buyer of Iranian crude, to help persuade Tehran to renounce the possible development of nuclear weapons. At an appearance with Chinese Premier Wen Jiabao (溫家寶), the German leader said sanctions were unavoidable.

Also on Thursday, Wen said Beijing might contribute to European bailout funds, but he made no financial commitment.

Yesterday, Hu told Merkel that Beijing wants to develop a “strategic partnership” and commercial relations with Germany, Xinhua news agency reported. There was no mention of whether the leaders discussed Iran.

The EU imposed an oil embargo on Iran last week and froze the assets of its central bank. In December, Washington said it would bar financial institutions from the US market if they do business with Iran’s central bank.

The People’s Daily commentary repeated previous Chinese arguments, but the decision to publish it while Merkel was visiting suggested Beijing’s attitude might be hardening.

The message “is that China hopes the United States and Iran can sit down and talk, and try not to use military force to resolve the problem,” said Wang Lian (王聯), an Iran specialist at Peking University’s school of international studies.

China depends on crude from Iran and other Gulf suppliers, such as Saudi Arabia, so “if war broke out between the United States and Iran, and the Strait of Hormuz were sealed off, China would be the first to suffer,” Wang said.

US Secretary of the Treasury Timothy Geithner visited Beijing last month to lobby China to buy less Iranian oil. Chinese leaders did not respond publicly, but officials said energy relations with Iran had no connection to its nuclear program.

On Thursday, Merkel appealed to Beijing to “make Iran understand that the world should not have another nuclear power.”

Merkel’s visit is also aimed at reassuring Beijing about Europe’s financial health following agreement this week on a treaty on government spending that its leaders hope will end their debt crisis and revive economic growth.

The EU is China’s biggest export market and Beijing’s stake in its financial health is growing as Chinese companies expand there. China’s biggest producer of construction equipment announced this week it was buying Germany’s Putzmeister, a maker of concrete pumps.

Merkel is the first of several European leaders to visit China this month for talks expected largely to focus on the global economic crisis.

Wen said on Thursday a resolution of Europe’s debt crisis is “urgent” and China might play a bigger role by contributing to the European Financial Stability Fund and the 500 billion euro (US$650 billion) European Stability Mechanism, scheduled to begin operations in July.